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Friday, 02/15/2019 4:07:41 PM

Friday, February 15, 2019 4:07:41 PM

Post# of 79678
AMENDMENT OF OUR CERTIFICATE OF INCORPORATION TO EFFECT

THE REVERSE STOCK SPLIT



GENERAL



On January 25, 2019, our board authorized an amendment of our Certificate of Incorporation to effect a reverse stock split at a ratio of 1-for-200. On January 25, 2019, stockholders holding a majority of our voting power approved this action. Pursuant to the Reverse Stock Split, each two hundred (200) shares of our common stock will be automatically converted, without any further action by the stockholders, into one share of common stock. No fractional shares of common stock will be issued as the result of the reverse stock split. Instead, the Company will issue to the stockholders one additional share of common stock for each fractional share which would otherwise be required to be issued. The Company anticipates that the effective date of the reverse stock split will be March __, 2019.



PLEASE NOTE THAT THE REVERSE STOCK SPLIT WILL NOT CHANGE YOUR PROPORTIONATE EQUITY INTERESTS IN THE COMPANY, EXCEPT AS MAY RESULT FROM THE ISSUANCE OF SHARES PURSUANT TO THE FRACTIONAL SHARES.



PURPOSES AND EFFECT OF THE REVERSE STOCK SPLIT



Our Board believes that, among other reasons, the number of outstanding shares of common stock have contributed to a lack of investor interest in the Company and has made it difficult for the Company to attract new investors and potential business candidates. The rationale of our Board’s proposed reverse stock split was generally to attract business opportunities for the Company and liquidity for our traded shares. The Board has determined that it would be in the Company’s (and shareholders”) best interest after due consideration of certain factors including, but not limited to the following:



(i) the current trading price of the Company’s shares of common stock on the OTC Pink market and potential to increase the marketability and liquidity of the Company’s common stock;

(ii) possible reluctance of brokerage firms and institutional investors to recommend lower-priced stocks to their clients or to hold in their own portfolios;

(iii) desire to meet future requirements of per-share price and net tangible assets and shareholders’ equity relating to admission for trading on other markets;

(iv) posturing the Company and its structure in favorable position in order to effectively negotiate with potential acquisition candidates; and

(v) provide the management of the Company with additional flexibility to issue shares to facilitate future stock acquisitions and financing for the Company.



While there can be no assurance that the reverse will have the desired benefits, the Board (in the exercise of discretion by the business judgment rule) believes that the reverse split is in the best interest of the Company and its shareholders.



However, the effect of the reverse stock split, if any, upon the stock price for our common stock cannot be predicted, and the history of similar stock split combinations for companies like us is varied. Further, we cannot assure you that the stock price of our common stock after the reverse stock split will rise in proportion to the reduction in the number of shares of common stock outstanding as a result of the reverse stock split because, among other things, the stock price of our common stock may be based on our performance and other factors as well.



The principal effect of the reverse stock split will be a decrease in the number of shares of common stock issued and outstanding from 1,170,544,913 shares as of January 25, 2019, to approximately 5,852,725 shares. The reverse stock split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership interest in the Company or proportionate voting power, except to the extent that the reverse stock split results in any of our stockholders holding a fractional share of our common stock. The common stock issued pursuant to the reverse stock split will remain fully paid and non-assessable. The reverse stock split shall not affect any rights, privileges or obligations with respect to the shares of common stock existing prior to the reverse stock split, nor does it increase or decrease the market capitalization of the Company. The reverse stock split is not intended as, and will not have the effect of, a “going private transaction” under Rule 13e-3 of the Exchange Act. We will continue to be subject to the periodic reporting requirements of the Exchange Act.

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The number of shares of Common Stock that the Corporation is authorized to issue shall not be affected by the Reverse Stock Split, and shall remain at 1,499,000,000, post the Reverse Split. By decreasing the number of issued and outstanding shares of common stock, more shares of common stock are available for issuance as a result of the reverse stock split. The Board believes that the availability of more shares of common stock for issuance will allow the Company greater flexibility in pursuing financing from investors and issuing shares of common stock in exchange for such financing, meeting business needs as they arise, taking advantage of favorable opportunities, and responding to a changing corporate environment.